Gov’t takes precautionary measures to control public debt
26-08-2015 13:40:32+07:00
Gov’t takes precautionary measures to control public debt
Though they believe that Vietnam’s public debt is not as dangerous as some international institutions say, government officials are applying measures to control the debt.
The Bank of America report on Vietnam’s public debt has once again raised deep concern about Vietnam’s public debt situation. The report says Vietnam’s public debt is ranked 12th in the world at risk of default.In the report, Vietnam has the most risk in ASEAN, with Indonesia ranked 13th, Malaysia 18th, Thailand 20th, and the Philippines 24th.
Dr. Bui Duc Thu, Member of the National Assembly’s Finance & Budget Committee, said that Vietnam’s public debt was not as dangerous as reported by international institutions.
Thu said the National Assembly keeps strict control over the public debt through the annual report of the government.
“The public debt now accounts for 64 percent of GDP. Its highest peak, estimated at 65 percent of GDP, would be reached by the end of 2015,” Thu said, adding that the situation was not worrying.
However, Thu said that with the public debt, it was necessary to be cautious. He has urged the government to tighten financial discipline and apply measures to control expenses.
Bank of America is not the only institution that gives warnings about Vietnam’s public debt.
The World Bank (WB) in late July announced that by the end of 2014, Vietnam's total public debt, including government debt, government guaranteed debt and local government debt, was estimated at VND2.35 million billion (about $110 billion).
The country’s public debt is higher than statistics published by local institutions.
Each Vietnamese person is carrying over $1,200 public debt, equivalent to more than half of the average annual income.
Other organizations such as the Japan International Cooperation Agency (JICA) and VinaCapital have also warned about the risk of Vietnam’s public debt.
While government officials are calm, economists have repeatedly raised concerns about the public debt.
“Vietnamese and foreign experts and institutions have all said they should find ways to settle the problem, while it should not forget about the facts by showing inaccurate figures,” said Bui Kien Thanh, a renowned financial expert, in an interview to Dat Viet.
Nguyen Tri Hieu, also a renowned finance expert, warned that if “Vietnam does not take drastic measures to control the public debt, the situation will be very alarming in five or 10 years”.
“International institutions have many times given warnings about Vietnam’s public debt and they will not stop lending one day if Vietnam’s public debt becomes uncontrollable,” Hieu said.
